August 2014
In his book, THE LONG TAIL, Chris Anderson outlines the opportunities for addressing small, yet high profitable niche markets. His book methodically outlines how Web 2.0 characteristics-- individualized needs, elaborate search capabilities, and social computing-- create the conditions for new niche markets. The author then shows how these niche markets, following the 80/20 rule, can be segmented in such a way as to provide revenue possibilities.
Chris thus highlights the first key question in marketing: Who is your customer? By mining the clues embedded in social media, marketing professionals can use web search tools to identify and solidify a a core set of needs that can then be addressed with an appropriate product or service solution. The resulting revenues for these relatively small markets can thus provide an opening for smaller firms to "fly under the radar" of larger organizations and win a significant (for the small firm) piece of the business. This enables the small firm to progressively build its brand reputation, its supply chain capabilities, and ultimately its market share.
This lesson should resonate with marketers of new, high-tech products. You do not have to address global markets immediately. Find small customer segments with real needs. Understand them. Address them with effective solutions. Then over time, delight those customers with the innovations you are capable of creating. In this way, you can find a pathway to success.
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